Reiterates Amended Fiscal Year 2024 Financial
Outlook
Today, Jabil Inc. (NYSE: JBL), reported preliminary, unaudited
financial results for its first quarter of fiscal year 2024.
“As previously announced, we experienced a broad-based softening
in demand during the final stretch of our first quarter, which you
can see reflected in our first quarter revenue,” said CEO Kenny
Wilson. “Despite softer demand, the team delivered good
year-over-year growth in core margins and core earnings per share,”
he added.
First Quarter of Fiscal Year 2024 Highlights:
- Net revenue: $8.4 billion
- U.S. GAAP operating income: $303 million
- U.S. GAAP diluted earnings per share: $1.47
- Core operating income (Non-GAAP): $499 million
- Core diluted earnings per share (Non-GAAP): $2.60
Second Quarter of Fiscal Year 2024 Outlook:
• Net revenue
$7.0 billion to $7.6 billion
• U.S. GAAP operating income (1)
$216 million to $301 million
• U.S. GAAP diluted earnings per share
(1)
$0.77 to $1.37 per diluted share
• Core operating income (Non-GAAP) (2)
$339 million to $399 million
• Core diluted earnings per share
(Non-GAAP) (2)
$1.73 to $2.13 per diluted share
______________________
(1)
Excludes the anticipated gain on the
divestiture of the Mobility business.
(2)
Core operating income and core diluted earnings per share exclude
anticipated adjustments of $6 million for amortization of
intangibles (or $0.05 per diluted share), $17 million for
stock-based compensation expense and related charges (or $0.13 per
diluted share) and $100 million to $75 million (or $0.78 to $0.58
per diluted share) for restructuring, severance and related
charges.
Fiscal Year 2024 Updated Outlook:
• Net revenue
$31 billion
• Core operating margin (Non-GAAP)
5.3% - 5.5%
• Core diluted earnings per share
(Non-GAAP)
$9.00+ per diluted share
• Adjusted Free Cash Flow (Non-GAAP)
$1+ billion
(Definitions: “U.S. GAAP” means U.S. generally accepted
accounting principles. Jabil defines core operating income as U.S.
GAAP operating income less amortization of intangibles, stock-based
compensation expense and related charges, restructuring, severance
and related charges, distressed customer charges, acquisition and
integration charges, loss on disposal of subsidiaries, settlement
of receivables and related charges, impairment of notes receivable
and related charges, goodwill impairment charges, business
interruption and impairment charges, net and costs from the
divestiture of businesses plus other components of net periodic
benefit cost. Jabil defines core earnings as core operating income,
less loss on debt extinguishment, loss (gain) on securities, other
components of net periodic benefit cost, income (loss) from
discontinued operations, gain (loss) on sale of discontinued
operations and certain other expenses, net of tax and certain
deferred tax valuation allowance charges. Jabil defines core
diluted earnings per share as core earnings divided by the weighted
average number of outstanding diluted shares as determined under
U.S. GAAP. Jabil defines adjusted free cash flow as net cash
provided by (used in) operating activities less net capital
expenditures (acquisition of property, plant and equipment less
proceeds and advances from sale of property, plant and equipment).
Jabil reports core operating income, core earnings, core diluted
earnings per share and adjusted free cash flow to provide investors
an additional method for assessing operating income, earnings,
diluted earnings per share and free cash flow from what it believes
are its core manufacturing operations. See the accompanying
reconciliation of Jabil’s core operating income to its U.S. GAAP
operating income, its calculation of core earnings and core diluted
earnings per share to its U.S. GAAP net income and U.S. GAAP
earnings per share and additional information in the supplemental
information.)
Forward Looking Statements: This release contains
forward-looking statements, including those regarding our
anticipated financial results for our first quarter of fiscal year
2024 and our guidance for future financial performance in our
second quarter of fiscal year 2024 (including, net revenue, U.S.
GAAP operating income, U.S. GAAP diluted earnings per share, core
operating income (Non-GAAP), core diluted earnings per share
(Non-GAAP) results and the components thereof, including but not
limited to amortization of intangibles, stock-based compensation
expense and related charges and restructuring, severance and
related charges) and our full year 2024 (including net revenue,
core operating margin (Non-GAAP), core diluted earnings per share
(Non-GAAP) results, the components thereof and Adjusted Free Cash
Flow (Non-GAAP)). The statements in this release are based on
current expectations, forecasts and assumptions involving risks and
uncertainties that could cause actual outcomes and results to
differ materially from our current expectations. Forward-looking
statements could be affected by the following factors, among
others, related to the sale of the Mobility business to BYD
Electronic (International) Company Limited (“BYDE”): the occurrence
of any event, change or other circumstance that could give rise to
the termination of the definitive agreement, or the failure to
satisfy closing conditions and consummate the potential
transaction; the ability of Jabil or BYDE to obtain required
regulatory approvals for the potential transaction and the timing
and conditions for such approvals, which may be obtained sooner
than expected; the ability to obtain any approval required from the
stockholders of BYDE; disruption from the potential transaction,
including potential adverse changes to relationships with
customers, employees, suppliers or other parties resulting from the
failure to consummate the potential transaction; potential
proceedings relating to the potential transaction that could be
instituted against Jabil; unexpected costs or unexpected
liabilities that may arise from the potential transaction, whether
or not consummated; the inability to retain key personnel; the
impact of changes in economic, market, political or social
conditions; and future regulatory or legislative actions that could
adversely affect the parties. Other factors that could impact
forward-looking statements include, but are not limited to: our
determination as we finalize our financial results for our first
quarter of fiscal year 2024 that our financial results and
conditions differ from our current preliminary unaudited numbers
set forth herein; scheduling production, managing growth and
capital expenditures and maximizing the efficiency of our
manufacturing capacity effectively; managing rapid declines or
increases in customer demand and other related customer challenges
that may occur; the effect of COVID-19 on our operations, sites,
customers and supply chain; our dependence on a limited number of
customers; our ability to purchase components efficiently and
reliance on a limited number of suppliers for critical components;
risks arising from relationships with emerging companies; changes
in technology and competition in our industry; our ability to
introduce new business models or programs requiring implementation
of new competencies; competition; transportation issues; our
ability to maintain our engineering, technological and
manufacturing expertise; retaining key personnel; risks associated
with international sales and operations, including geopolitical
uncertainties; energy price increases or shortages; our ability to
achieve expected profitability from acquisitions; risk arising from
our restructuring activities; issues involving our information
systems, including security issues; regulatory risks (including the
expense of complying, or failing to comply, with applicable
regulations; risk arising from design or manufacturing defects;
risk arising from compliance, or failure to comply, with
environmental, health and safety laws or regulations and
intellectual property risk); financial risks (including customers
or suppliers who become financially troubled; turmoil in financial
markets; tax risks; credit rating risks; risks of exposure to debt;
currency fluctuations; and asset impairment); changes in financial
accounting standards or policies; risk of natural disaster, climate
change or other global events; and risks arising from expectations
relating to environmental, social and governance considerations.
Additional factors that could cause such differences can be found
in our Annual Report on Form 10-K for the fiscal year ended August
31, 2023 and our other filings with the Securities and Exchange
Commission. We assume no obligation to update these forward-looking
statements.
Supplemental Information Regarding Non-GAAP Financial
Measures: Jabil provides supplemental, non-GAAP financial
measures in this release to facilitate evaluation of Jabil’s core
operating performance. These non-GAAP measures exclude certain
amounts that are included in the most directly comparable U.S. GAAP
measures, do not have standard meanings and may vary from the
non-GAAP financial measures used by other companies. Management
believes these “core” financial measures are useful measures that
facilitate evaluation of the past and future performance of Jabil’s
ongoing operations on a comparable basis.
Jabil reports core operating income, core earnings, core diluted
earnings per share and adjusted free cash flows to provide
investors an additional method for assessing operating income,
earnings, earnings per share and free cash flow from what it
believes are its core manufacturing operations. Among other uses,
management uses non-GAAP financial measures to make operating
decisions, assess business performance and as a factor in
determining certain employee performance when determining incentive
compensation.
The Company determines an annual normalized tax rate
(“normalized core tax rate”) for the computation of the non-GAAP
(core) income tax provision to provide better consistency across
reporting periods. In estimating the normalized core tax rate
annually, the Company utilizes a full-year financial projection of
core earnings that considers the mix of earnings across tax
jurisdictions, existing tax positions, and other significant tax
matters. The Company may adjust the normalized core tax rate during
the year for material impacts from new tax legislation or material
changes to the Company’s operations.
Detailed definitions of certain of the core financial measures
are included above under “Definitions” and a reconciliation of the
disclosed core financial measures to the most directly comparable
U.S. GAAP financial measures is included under the heading
“Supplemental Data” at the end of this release.
Meeting and Replay Information: Jabil will hold a
conference call today at 8:30 a.m. ET to discuss its earnings for
the first quarter of fiscal year 2024. To access the live audio
webcast and view the accompanying slide presentation, visit the
Investor Relations section of Jabil’s website, located at
https://investors.jabil.com. An archived replay of the webcast will
also be available after completion of the call.
About Jabil: Jabil (NYSE: JBL) is a manufacturing
solutions provider with over 250,000 employees across 100 locations
in 30 countries. The world’s leading brands rely on Jabil’s
unmatched breadth and depth of end-market experience, technical and
design capabilities, manufacturing know-how, supply chain insights
and global product management expertise. Driven by a common
purpose, Jabil and its people are committed to making a positive
impact on their local community and the environment. Visit
www.jabil.com to learn more.
JABIL INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in millions)
November 30, 2023
(unaudited)
August 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
1,550
$
1,804
Accounts receivable, net
3,693
3,647
Contract assets
1,090
1,035
Inventories, net
5,124
5,206
Prepaid expenses and other current
assets
1,235
1,109
Assets held for sale
1,962
1,929
Total current assets
14,654
14,730
Property, plant and equipment, net
3,134
3,137
Operating lease right-of-use asset
354
367
Goodwill and intangible assets, net
838
763
Deferred income taxes
155
159
Other assets
279
268
Total assets
$
19,414
$
19,424
LIABILITIES AND EQUITY
Current liabilities:
Current installments of notes payable and
long-term debt
$
—
$
—
Accounts payable
5,630
5,679
Accrued expenses
5,840
5,515
Current operating lease liabilities
96
104
Liabilities held for sale
1,464
1,397
Total current liabilities
13,030
12,695
Notes payable and long-term debt, less
current installments
2,876
2,875
Other liabilities
342
319
Non-current operating lease
liabilities
269
269
Income tax liabilities
118
131
Deferred income taxes
243
268
Total liabilities
16,878
16,557
Commitments and contingencies
Equity:
Jabil Inc. stockholders’ equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
2,827
2,795
Retained earnings
4,595
4,412
Accumulated other comprehensive loss
(6
)
(17
)
Treasury stock, at cost
(4,881
)
(4,324
)
Total Jabil Inc. stockholders’ equity
2,535
2,866
Noncontrolling interests
1
1
Total equity
2,536
2,867
Total liabilities and equity
$
19,414
$
19,424
JABIL INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in millions, except for per
share data)
(Unaudited)
Three months ended
November 30, 2023
November 30, 2022
Net revenue
$
8,387
$
9,635
Cost of revenue
7,612
8,892
Gross profit
775
743
Operating expenses:
Selling, general and administrative
314
319
Research and development
10
9
Amortization of intangibles
6
8
Restructuring, severance and related
charges
127
45
Costs from the divestiture of
businesses
15
—
Operating income
303
362
Interest and other, net
68
63
Income before income tax
235
299
Income tax expense
41
76
Net income
194
223
Net income attributable to noncontrolling
interests, net of tax
—
—
Net income attributable to Jabil Inc.
$
194
$
223
Earnings per share attributable to the
stockholders of Jabil Inc.:
Basic
$
1.49
$
1.65
Diluted
$
1.47
$
1.61
Weighted average shares outstanding:
Basic
129.6
134.8
Diluted
132.1
138.0
JABIL INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Three months ended
November 30, 2023
November 30, 2022
Cash flows provided by operating
activities:
Net income
$
194
$
223
Depreciation, amortization, and other,
net
206
263
Change in operating assets and
liabilities, exclusive of net assets acquired
48
(320
)
Net cash provided by operating
activities
448
166
Cash flows used in investing
activities:
Acquisition of property, plant and
equipment
(288
)
(314
)
Proceeds and advances from sale of
property, plant and equipment
13
150
Cash paid for business and intangible
asset acquisitions, net of cash
(59
)
—
Proceeds from the divestiture of
businesses
258
—
Other, net
1
(12
)
Net cash used in investing activities
(75
)
(176
)
Cash flows used in financing
activities:
Borrowings under debt agreements
395
1,026
Payments toward debt agreements
(436
)
(1,061
)
Payments to acquire treasury stock
(500
)
(161
)
Dividends paid to stockholders
(12
)
(12
)
Treasury stock minimum tax withholding
related to vesting of restricted stock
(67
)
(33
)
Net cash used in financing activities
(620
)
(241
)
Effect of exchange rate changes on cash
and cash equivalents
(7
)
(10
)
Net decrease in cash and cash
equivalents
(254
)
(261
)
Cash and cash equivalents at beginning of
period
1,804
1,478
Cash and cash equivalents at end of
period
$
1,550
$
1,217
JABIL INC. AND
SUBSIDIARIES
SUPPLEMENTAL DATA
RECONCILIATION OF U.S. GAAP
FINANCIAL RESULTS TO NON-GAAP MEASURES
(in millions, except for per
share data)
(Unaudited)
Three months ended
November 30, 2023
November 30, 2022
Operating income (U.S. GAAP)
$
303
$
362
Amortization of intangibles
6
8
Stock-based compensation expense and
related charges
46
42
Restructuring, severance and related
charges(1)
127
45
Net periodic benefit cost
2
4
Costs from the divestiture of
businesses
15
—
Adjustments to operating income
196
99
Core operating income
(Non-GAAP)
$
499
$
461
Net income attributable to Jabil Inc.
(U.S. GAAP)
$
194
$
223
Adjustments to operating income
196
99
Net periodic benefit cost
(2
)
(4
)
Adjustments for taxes
(45
)
1
Core earnings (Non-GAAP)
$
343
$
319
Diluted earnings per share (U.S. GAAP)
$
1.47
$
1.61
Diluted core earnings per share
(Non-GAAP)
$
2.60
$
2.31
Diluted weighted average shares
outstanding (U.S. GAAP & Non-GAAP)
132.1
138.0
_________________
(1)
Charges recorded during the three months ended November 30, 2023,
related to the 2024 Restructuring Plan.
JABIL INC. AND
SUBSIDIARIES
SUPPLEMENTAL DATA
ADJUSTED FREE CASH
FLOW
(in millions)
(Unaudited)
Three months ended
November 30, 2023
November 30, 2022
Net cash provided by operating
activities (U.S. GAAP)
$
448
$
166
Acquisition of property, plant and
equipment (“PP&E”)(1)
(288
)
(314
)
Proceeds and advances from sale of
PP&E(1)
13
150
Adjusted free cash flow
(Non-GAAP)
$
173
$
2
_________________
(1)
Certain customers co-invest in PP&E with us. As we acquire
PP&E, we recognize the cash payments in acquisition of
PP&E. When our customers reimburse us and obtain control, we
recognized the cash receipts in proceeds and advances from the sale
of PP&E.
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version on businesswire.com: https://www.businesswire.com/news/home/20231214522785/en/
Investor Contact Adam Berry Vice President, Investor
Relations Adam_Berry@jabil.com
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